Eldercare Workforce Alliance Members Urge Labor and Health Departments to Reexamine “Companionship Exemption” Policy
May 12, 2009
1975 Policy Exempts Home- and Community-Based Care Workers – Who Care for Growing Numbers of Older and Disabled Americans – From Wage and Overtime Protections
Exemptions Mean Poor Pay For Workers, and Contribute to High Turnover
Washington, DC -- In a letter to Labor Secretary Hilda Solis and Health and Human Services Secretary Designate Kathleen Sebelius, the Eldercare Workforce Alliance (EWA) – a coalition of 28 organizations representing older and disabled adults and the healthcare professionals, direct-care workers, and family who care for them – has asked for a reexamination of the Department of Labor’s (DOL) controversial “companionship exemption” policy.
Under the “companionship exemption” policy, which dates to 1975, the nation’s 1.5 million home- and community-based care workers can be classified as “companions” –thereby exempting their employers from federal minimum wage and overtime standards. Since 1975, however, the nature of the work many home care aides perform has changed dramatically. Due to the significant, and accelerating, growth in the number of older Americans and people with disabilities, many home care workers provide far more than companionship to the seniors for whom they care. Many home care workers take vital signs and help older adults perform daily activities such as eating, bathing, toileting, and getting from place to place – including to and from healthcare providers’ offices .
In light of home care workers’ increased responsibilities, the Alliance recommends:
• That the DOL seek input from key stakeholders—users of home care services, their family caregivers, home care workers, and employers—to help shape the definitions and manner in which the companionship exemption might be amended.
• That the DOL consider the impact of any potential changes on consumer-directed programs, including those that pay family caregivers to provide services, to avoid any unintended consequences. This will help ensure a smooth implementation of any potential changes to the companionship exemption.
• That DOL cooperate closely with the Department of Health and Human Services (DHHS), seeking ways in which DHHS can give guidance to states on managing any resulting increase in the cost of providing home care services.
• That upon any final decision to extend federal minimum wage and overtime protection to home care workers, the DOL grant states, home care delivery systems, and employers a time-limited “grace period” to adjust to the revised exemption.
The EWA emphasizes that exempting home care workers from minimum wage and overtime protections results in poor pay for long hours and leads to high turnover, which undermines the quality of care and drives up the cost of providing home care. The result can be a needless drain on Medicaid, which pays for many home care services. Poor pay and inadequate benefits for home care jobs also increases costs to taxpayers because nearly half of home care workers rely on food stamps or other public assistance.
In its letter to Secretary Solis and Secretary Sebelius, EWA acknowledges that the companionship exemption is complex, and that a number of issues must be considered in addressing it. The letter, signed by 25 members of the Alliance, also acknowledges that some home care workers, such as live-in staff, might still justify continued exemption. In addition, it notes that several states have developed extensive home care service delivery systems that assume the exception will stay in place. “Consequently, an abrupt implementation of any significant reinterpretation might in some states cause temporary but significant disruption – for consumers, workers, and employers,” the Alliance writes.
“The eldercare industry employs millions of individuals in the United States, and according to the DOL, is the fastest-growing employment sector within the healthcare industry,” says Nancy Lundebjerg, co-convener of the EWA, and Deputy Executive Vice President of the American Geriatrics Society. “The Alliance believes that an important part of improving the quality of care is ensuring the recruitment and retention of a quality workforce, which includes paying adequate wages to home care and other eldercare workers. Strengthening home care occupations can also drive long-term economic growth, particularly within low-income communities.”
The EWA was established earlier this year in direct response to the Institute of Medicine’s groundbreakings 2008, Retooling for an Aging America: Building the Health Care Workforce. The report called for immediate investments in preparing our healthcare system to care for the rapidly increasing numbers of older Americans and their families. “The Direct Care Alliance joined EWA because we share a common vision for ensuring an ample and qualified direct care workforce,” says Leonila Vega, Esq., executive director of the Direct Care Alliance, an EWA member organization. “Both as a practical matter and as a matter of respect, earning basic minimum wage and overtime protections is important to home care workers who are so integral to high quality care . EWA’s strong leadership on this matter shows what can happen when all elder care constituencies come together to bring about key reforms. ”
